- Chief executive and chief financial officer have purchased a combined £152,000 in shares
- The shares trade at a sharp discount to NAV reflecting caution around new lettings and occupancy levels
Concerns surrounding how many companies will make a permanent shift to home- or hybrid-working post-pandemic has caused shares in London-listed office landlords to trade at sizeable discounts to net asset value. For CLS (CLI), that gap stands at 27 per cent versus NAV at the end of December.
That market valuation can either be viewed as a value opportunity or an apt foreshadowing of falling occupancy. CLS's management has placed itself in the former camp, with chief executive Fredrik Widlund and chief financial officer Andrew Kirkman purchasing a combined £152,000 in shares in the group.
The executives could have good reason for their apparent confidence. Estimated rental values have grown across the UK, France and Germany. The latter continued to lead the way, generating a 3.1 per cent increase. An increase in the portfolio valuation and a robust rent collection rate of 99 per cent, also meant the EPRA net tangible asset value rose by almost 6 per cent, ahead of forecasts from some analysts.
However, potential occupiers have been circumspect around the economic outlook, which caused a rise in the vacancy rate to 5.3 per cent at end of December, up from 4 per cent the prior year.
The roll-out of the vaccine across Europe could aid the pace of new lettings, although Mr Widlund has indicated that he doesn’t expect a marked increase in occupancy before June, when more social restrictions are lifted.
The shares have rallied almost a fifth since news of the vaccine success broke in November. Yet given the group’s resilient rent collection and exposure to the higher demand German office market, there could be room for a further re-rating. Buy.
Last IC view: Buy, 223p, 9 Mar 2021
Buys | ||||
Company | Director/PDMR | Date | Price (p) | Aggregate value (£) |
CLS Holdings | Fredrik Widlund (ce) | 10 Mar 2021 | 220 | 51,450 |
CLS Holdings | Andrew Kirkman (cfo) | 10 Mar 2021 | 222 | 110,760 |
Devro | Steve Good (ch) | 10 Mar 2021 | 184 | 36,880 |
Howden Joinery | Paul Hayes (cfo) | 10 Mar 2021 | 714 | 49,980 |
Mondi | Mike Powell (cfo) | 10 Mar 2021 | 1,790 | 99,273 |
Rathbone Brothers | Clive Bannister | 10 Mar 2021 | 1,640 | 250,920 |
Sage | Lee Perkins | 11 Mar 2021 | 589 | 88,314 |
Serco Group | Tim Lodge | 12 Mar 2021 | 1,272 | 50,880 |
St James's Place | Emma Griffin | 15 Mar 2021 | 1,240 | 24,809 |
Standard Life Aberdeen | Jonathan Paul Asquith | 09 Mar 2021 | 296 | 88,878 |
Standard Life Aberdeen | Sir Douglas Jardine Flint (ch) | 09 Mar 2021 | 297 | 39,793 |
UDG Healthcare | Shane Cooke | 15 Mar 2021 | 762 | 95,250 |
Ultra Electronics | Mark Josceline Sclater (cfo) | 09 Mar 2021 | 2,075 | 68,819 |
Sells | ||||
Company | Director/PDMR | Date | Price (p) | Aggregate value (£) |
Anglo American | Didier Charreton | 10 Mar 2021 | 2,928 | 2,553,743 |
Anglo American | Bruce Cleaver | 10 Mar 2021 | 2,885 | 721,250 |
Wizz Air Holdings | Heiko Holm (cfo) | 11 Mar 2021 | 5,515 | 551,500 |